CCH Weekly Report from Washington

The 112th Congress rang in the new year by passing the American Taxpayer Relief Act of 2012 (HR 8 ) on January 1, making the Bush-era tax rates permanent for individuals and couples with annual income over $400,000 and $450,000, respectively. President Obama signed the measure on January 2.

President Obama and House Speaker John Boehner, R-Ohio, met for 50 minutes in the early evening on December 13 to discuss the fiscal cliff before Boehner returned to Ohio for the weekend, representing only the second time the two leaders have met face-to-face since the new talks began. Sens. Charles E. Schumer, D-N.Y., and Robert Menendez, D-N.J., introduced comprehensive tax legislation to help individuals and businesses rebuild in the aftermath of Hurricane Sandy;

After winning reelection on November 6, President Obama invited the leadership of the GOP-controlled House and Democratic controlled Senate to a White House meeting during the week of November 12 to address the so-called fiscal cliff.

An IRS official speaking at a panel discussion on the impact of the recent Third Circuit Court of Appeals case Historic Boardwalk Hall, LLC (2012-2 ustc ¶50,538 ) noted that the Service would not challenge legitimate tax credit partnerships

During the second of three debates prior to the election, Republican presidential candidate Mitt Romney steadfastly stood by his claim that he would cut tax rates by 20 percent without increasing the deficit despite charges by President Obama that the math did not add up. The Joint Committee on Taxation (JCT) released a report indicating that individual tax rate reduction from closing tax expenditures, credits or deductions would only generate enough savings to reduce marginal tax rates by 4 percent. The IRS has released various inflation-adjusted amounts for 2013, as well as cost-of-living adjustments (COLAs) that affect pension plan dollar limitations and other retirement-related provisions, effective January 1, 2013.

During a speech at the National Press Club, Sen. Charles E. Schumer, D-N.Y., said that lowering the top individual tax rates would be a serious mistake and counterproductive to solving the nation’s economic woes. He added that federal policymakers eyeing an overhaul of the U.S. tax code in the coming months should abandon such thinking and focus on reducing the deficit. The IRS, meanwhile, has posted answers to frequently asked questions about same-sex couples, registered domestic partners, and same-sex spouses in community property states. The Service has also implemented two separate clarifying changes to its temporary procedures for issuing individual taxpayer identification numbers (ITINs).

President Obama and former Gov. Mitt Romney debated federal tax policy on October 3, with Romney saying he supports deficit-neutral tax cuts that create jobs and boost the economy while the president said that he would cut taxes for manufacturers to 25 percent, paid for by closing various tax loopholes.